What Are the Different Types of Trusts?

A trust product is a financial wealth management product that provides investors with low risk and stable income returns. Trust products are very diverse in product design, and each will have different characteristics. There may be significant differences in the risk and return potential of each trust product.

Trust products

A trust product is a product that provides investors with low

Effective March 1, 2007

(I) Asymmetry between supervision concept and supervision ability

Judging from a series of regulatory measures formulated by various regulatory agencies, the regulators almost always want to supervise capital,

(A) adhere to the regulatory principles of incentive compatibility, efficiency and competition

In reality, people always make behavior choices that are beneficial to them under the given constraints. As a product of the evolution of financial division of labor and the deepening of financial markets to a certain stage, cross-financial instruments are the result of a dynamic feedback mechanism between the supply and demand sides of financial instruments that weigh the dilemma of economic division of labor and transaction costs. That is to say, the benefits of the division of labor economy must outweigh the transaction costs, and cross-cutting financial instruments will be created and exist, which will help improve the efficiency of resource allocation. The reward of the division of labor economy here refers to the benefits of financial specialization economy, scope economy, and synergy. Transaction costs include endogenous transaction costs and exogenous transaction costs. Endogenous transaction costs are losses caused by human failure due to opportunistic behavior. Exogenous transaction costs are the costs of negotiating, enforcing contracts, and protecting property rights. The reduction of these two transaction costs has an unresolvable dilemma, namely, reducing endogenous Transaction costs and exogenous transaction costs that increase the negotiation and execution of contracts. Supervision costs are exogenous transaction costs, and intermediary ratings of financial institutions and financial instruments are exogenous transaction costs. Weighing this dilemma is a complex mechanism and process. Supervisory agencies are seeking a safe and stable financial development in the dilemma of trading instrument financial efficiency and financial instrument transaction costs (risks) under various established constraints. From this point on, the regulatory principles that should be adhered to are: efficiency, competition, and incentive compatibility.

The so-called efficiency principle is that the regulatory agency should introduce policies and measures within the scope of statutory authorization, reduce the endogenous transaction costs incurred by various stakeholders as much as possible, and at the same time increase the exogenous transaction costs appropriately. Ratings of financial institutions and financial instruments, protection of the legitimate rights and interests of consumers of financial products, and improving the transaction efficiency of cross-financial instruments, so that the benefits to all parties are greater than the transaction costs.

The so-called competition principle is to implement uniform game rules for similar financial products and maintain fair competition. When a professional has many peers many times

First, choose a reputable

I. Related expenses of fixed income trust financial products

The related management fees for fixed income trust financial products are generally collected from the financier (borne by the trust property) and generally have no relationship with investors. The expected trust network income of the trustee in the trust contract is a fairly fixed net profit wealth income. The expenses of the fixed income trust property mainly include: the trust remuneration received by the trustee (trust company), and the fees received by the custodian (custodian bank)

According to the research of Good Buy Fund Research, some past products were published by small households, and the frequency of publications was low. On the one hand, it is because of the constraints brought by the "Net Assets Management Law"; on the other hand, trust products are still at the bottom of the economy, and corporate investment and financing needs to be low, so the publication of trust products has slowed down. For example, in the first half of the last year, the number of products created by the foreign trade trust each month exceeded 20, but since July last year, the number of its products has been linked to 5 per month, the department month and even the only two or three Product publication.

At the end of 2012, the scale of bank wealth management funds and trust asset management both exceeded the 7 trillion mark, which aroused the attention of all sectors of the community and discussed their scale and risks. This article mainly compares the similarities and differences between the two. Bank wealth management refers to wealth management products that are bank-led and issued by banks. The products sold by other financial institutions and investment companies on behalf of banks are not in this scope. Trust products refer to products developed, designed and acted as trustees by trust companies.

I. Similarities

1. Both are financial institutions directly supervised by the State Banking Regulatory Commission and have high social credibility.

2. Neither of them can promise in the contract to protect the capital and protect the income, which is a requirement of the CBRC. Everything that is said to customers is verbal and cannot be reflected in the contract. Whoever dares to violate the rules will have the contract invalid.

3. The bank's wealth management funds and trust fund pool products have no clear fund use (referring to clear fund users, capital projects, etc.). They are actively managed by the issuer, and the issuer endorses payment in its own credit. .

Differences

1. A large part of the bank's wealth management fund pool is docking trust products, and one third of the trust asset management scale comes from bank wealth management funds. Tencent Finance's picture report reveals that bank wealth management income mainly comes from trusts:

2. Trust wealth management has a debt isolation function that bank wealth management does not have. According to the "Trust Law": Trust assets are independent and cannot be settled, bankrupted, liquidated and divided. It is a piece of property that is independent from the property of the client, trustee and beneficiary. Therefore, trust assets are often used as wealth management and wealth transfer tools in developed countries. Banking assets, funds, real estate, etc. should be frozen or used to settle debts, liquidate, and divide in case of debt disputes, legal litigation disputes, divorce, etc. For details, please refer to the author's blog post "How to Use the Independence of Trust Property to Avoid the Four Risks of Personal Assets" and "Discussing the Trust's Property Separation Function in Marriage from the Rich Marriage of Wu Yajun and Xu Yi.

3. The main advantage of bank financial management is the convenience of terms, especially in the short term, with high liquidity; but this advantage is being penetrated by trust products, such as Zhongrong Trust Convergence No. 1, and subscribers can order 7 by themselves Days, 14 days, 30 days, 60 days, 90 days, 180 days, 270 days, 360 days, the returns are higher than the banks in the same period.

4. The two have different degrees of specialization. The core business of banks is the spread of deposits and loans; banks rarely actively research and develop wealth management products, and basically use wealth management products to connect trusts, urban investment bonds, and corporate bonds to earn interest spreads. A trust company is a professional wealth management company. Each investment business must complete due diligence, develop and design products independently. Therefore, it is better than the bank in the investment profession.

5. Banking is more popular. The threshold is usually 50,000; the threshold for trust is higher. There are two grades of 1 million and 3 million. 3 million can choose products freely. One million has more restrictions. There are only 50 places for a project.